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CONFIDENTIAL OFFERING MEMORANDUM Newberry, SC Starbucks/Firehouse Subs Brand New Construction

Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

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Page 1: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

CONFIDENTIAL OFFERING MEMORANDUM

Newberry, SC

Starbucks/Firehouse SubsBrand New Construction

People Places Purpose

COLLETT - NEWBERRY, SC SHELL BUILDINGLeft Perspective

10 April 2018

Page 2: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

Rob Schmidt Vice President

[email protected]

864 678 5995

Peter Couchell Managing Director/Shareholder

[email protected]

864 678 5923

Investment Overview 03 Executive Summary

Market Overview 15 Market Analysis

17 Demographics

Property Overview 04 Regional Maps

06 Local Map

07 Economic Drivers

08 Retailer Map

09 Survey

10 Building Elevations

Tenant Overview 12 Tenant Summary

TABLE OF CONTENTS EXCLUSIVELY LISTED BY

Financial Overview 14 Rent Roll & Underwriting

Page 3: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

3 . Starbucks & Firehouse Subs | Newberry, SC

INVESTMENT OVERVIEW

Address1228 Wilson Rd

Newberry, SC 29108

Total GLA ±4,040 SF

Total Land Size ±0.59 Acres

Year Built 2019

Parking 20 Spaces

Shared Additional Parking 11 Spaces

NOI $114,136

Cap Rate 6.50%

List Price $1,755,932

Tenant Starbucks Corporate

Lease Type NNN

Taxes/CAM/Insurance Tenant Responsibility

Roof/Structure Landlord Responsibility

Original Lease Term 10-Years

Lease Commencement Q3 2019

Rent Increases 10% Increase in year 6

Renewal Options 4 - 5 yearFINANCIAL SUMMARY

Tenant TLC Enterprises, LLC

Lease Type NNN

Taxes/CAM/Insurance Tenant Responsibility

Roof/Structure Landlord Responsibility

Original Lease Term 10-Years

Lease Commencement Q3 2019

Rent Increases 10% Increase in year 6

Renewal Options 2 - 5 year

STARBUCKS LEASE SUMMARY

FIREHOUSE LEASE SUMMARY

PROPERTY SUMMARY

Execut ive Summary

• Best location, visibility, & access in the market• Brand new construction with 10-year leases• Favorable rent growth with 10% increases every 5 years• Nearby traffic generators include Newberry College,

Piedmont Tech, Newberry High School, Newberry Hospital, Lowes & Walmart

• Starbucks is a strong corporate investment grade tenant (S&P: BBB+)

• Firehouse Subs is operated & guaranteed by the companies largest franchisee with 31 locations

INVESTMENT HIGHLIGHTS

Page 4: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

4 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWRegional Map

Columbia

Charlotte

Atlanta

39.4 MilesFrom Site

199 MilesFrom Site

100 MilesFrom Site

Asheville

Spartanburg

SITE

67.5 MilesFrom Site

Greenville58.3 MilesFrom Site

121 MilesFrom Site

Page 5: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

5 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWRegional Map

Newberry

±38 min /39.4 miles

From Siteto Downtown

Columbia

SITE

Page 6: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

6 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWLocal Map

2 7 0 0 E m p l o y e e s

1 , 1 9 0 S t u d e n t s

7 0 0 S t u d e n t s

4 9 0 E m p l o y e e s

NEWBERRY HIGH SCHOOL

Home of the Bulldogs

8 1 5 S t u d e n t s

2 3 0 E m p l o y e e s

9 0 0 E m p l o y e e s

MID CAROLINA COMMERCE PARK

SC Certified Industrial Mega Site

Wilson Rd

SITE

Main St

Win

nsb

oro

Rd ±9,300

VPD

±19,600 VPD

±40,900 VPD

±8,400 VPD

Page 7: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

7 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWEconomic Dr ivers

Company EmployeesKraft Heinz 2,700 Samsung Electronics 650Newberry Co Memorial Hospital 450Georgia-Pacific Corp. 275Valmont Composite Structures 250Komatsu America 230Kiswire Inc. 200ISE Newberry 183Pioneer Frozen Foods 160West Fraser Timber Co. 150

NEWBERRY COUNTY TOP EMPLOYERS

*Newberry County Economic Development

NEWBERRY COUNTY HIGHER EDUCATION

#13 Best Regional Colleges in the South#3 Best Value Regional Colleges in the South1,190 Students> newberry.edu

PTC is a public community college with its main campus in Greenwood, SC. It serves seven counties in the Lakelands region of South Carolina including Newberry County.700 Students at the Newberry Campus> ptc.edu/about/locations/newberry

Turkeys are South Carolina’s second-largest farm product, far bigger than peaches, cotton or tobacco. Most of the turkey sold under the Oscar Mayer name passes through a factory in Newberry. This factory processes millions of turkeys a year though its parent company Kraft Heinz and it’s the largest of three Oscar Mayer turkey plants in the nation. The prominence of turkeys in the Palmetto State economy owes to the forces of

logistics plied by one of the world’s largest food producers. The emergence of South Carolina’s turkey supply chain is akin to the growth of auto parts manufacturing that followed BMW’s factory in Spartanburg and the aerospace work that followed Boeing’s arrival in North Charleston. Companies like BMW and Boeing are sought after because it takes a sophisticated supply chain to build cars and planes. Growing turkeys isn’t so different. > READ MORE

Samsung’s new $380 million home appliance manufacturing facility in Newberry County, SC. > READ MORE

Page 8: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

8 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWRetai ler Map

Newberry City Fire Station

Wilson Rd

Mai

n S

t

±17,800 VPD

SITE

*Site lines are approximate

Page 9: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

9 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWSurvey

NOT INCLUDED

ADDITIONAL SHARED PARKING

Page 10: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 0 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWProperty Photos

12' -

0"

HARDIPANEL SIDINGW/ BATTENS

HARDIPANEL SIDING

CEDAR SIDING HARDIPANEL SIDINGW/ BATTENS

HARDIPANEL SIDING

15 South Main Street Suite 400 I Greenville, SC 29601 I 864.232.8200 I www.DP3architects.com

COLLETT - NEWBERRY, SCSTARBUCK'S LOD - BUILDING ELEVATIONS

04/10/18

1/8" = 1'-0"SD21 SIDE ELEVATION

1/8" = 1'-0"SD22 DRIVE THRU SIDE ELEVATION

Page 11: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 1 . Starbucks & Firehouse Subs | Newberry, SC

PROPERTY OVERVIEWProperty Photos

CEDAR SIDING

HARDIPANEL SIDINGW/ BATTENS

EQUIPMENT SCREEN

HARDIPANEL SIDING

HARDIPANEL SIDINGW/ BATTENS HARDIPANEL SIDING METAL CANOPY

12' -

0"

15 South Main Street Suite 400 I Greenville, SC 29601 I 864.232.8200 I www.DP3architects.com

COLLETT - NEWBERRY, SCSTARBUCKS' LOD - BUILDING ELEVATIONS

04/10/18

1/8" = 1'-0"SD31 REAR ELEVATION

1/8" = 1'-0"SD32 FRONT ELEVATION

Page 12: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 2 . Starbucks & Firehouse Subs | Newberry, SC

TENANT OVERVIEWTenant Summary

Founded1971, Pike Place Market,

Seattle, WA

Headquartered Seattle, WA

S&P Rating BBB+

Number of Locations±28,218 retail stores

in 76 countries

Number of Employees ±277,000

Stock Symbol SBUX (NYSE)

Starbucks is an American global coffee company that is currently the largest coffee shop in the world with over 28,000 retail stores in 76 countries.

FactSet expects Starbucks to report earnings per share of 60 cents, up from 55 cents last year. Analysts tracked by FactSet expect revenue of $6.27 billion, up from $5.70 billion last year. Starbucks has beaten the FactSet revenue consensus for the past three quarters. Starbucks shares have also rallied 11.8% for the last three months, and are up 6.8% over the past year.

The company’s brand portfolio includes Starbucks Coffee, Seattle’s Best Coffee, Teavana, Tazo, Evolution Fresh, La Boulange, Ethos Water and Torrefazione Italia Coffee.

One of the “World’s Most Admired Companies”Fortune – 2009-2017

One of the “World’s Most Ethical Companies” Ethisphere – 2007-2017

100% Rating on the Corporate Equality Index Human Rights Campaign Foundation – 2015-2017

One of the “Top 10 Millennial Brands” Adweek – 2017

One of the “World’s Most Valuable Brands” Forbes – 2013-2017

Named a “Top Growing Global Brand” Interbrand – 2017

One of the “Top 10 Military Spouse-Friendly Employers” Victory Media – 2017

Page 13: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 3 . Starbucks & Firehouse Subs | Newberry, SC

TENANT OVERVIEWTenant Summary

Celebrating 25 years of business in 2019, Firehouse Subs® is a fast casual restaurant chain with a passion for hearty and flavorful food, heartfelt service and public safety. Founded in 1994 by brothers and former firefighters Chris Sorensen and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with the highest quality meats and cheeses and its commitment to saving lives through the establishment of the non-profit Firehouse Subs Public Safety Foundation®. TLC Enterprises, LLC is the largest Firehouse Sub franchisee with 31 locations throughout the Carolinas, of which 13 are in the Columbia/Newberry, SC market.

#1 in the fast casual restaurant industry on the list of America’s Best Customer Service BrandsNewsweek - 2019

#1 among Fast Casual brands in “Food Quality” and “Taste and Flavor”Technomic’s Consumer Brand Metrics rankings

#2 in “America’s Favorite Fast Casual Chain” Technomic Ignite

#60 Entrepreneur Franchise 500 Fastest-Growing FranchisesEntrepreneur Magazine - 2019

#1 Fast Casual Brand in “Food Quality” and “Taste & Flavor” categories - Q3 2017-Q3 2018Technomic Consumer Brand Rankings

No. 1 brand in the restaurant industry that “Supports Local Community Activities”

Founded 1994 in Jacksonville, FL

Headquartered Jacksonville, FL

Number of Locations±1,160 restaurants in 46 states,

Puerto Rico, Canada and non-traditional locations

Parent Company Firehouse of America, LLC

Franchisee TLC Enterprises, LLC

Page 14: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 4 . Starbucks & Firehouse Subs | Newberry, SC

RENT ROLLSquare Lease Lease

Tenant Feet Start Date End Date $/SF Monthly Annual Taxes Insurance CAM Options

Starbucks 2,200 TBD 10 Years $32.05 $5,875 $70,500 Net Net Net (4) 5 Year

Firehouse Subs 1,840 TBD 10 Years $25.00 $3,833 $46,000 Net Net Net (2) 5 Year

TOTAL PROPERTY 4,040 $28.84 $9,708 $116,500

TENANT NOTESStarbucks 10% Admin Fee can be passed thru as part of CAM. Subject to a 5% non-cumulative annual cap on CAM

Right of early termination on or after the 60th month with 120 day notice with termination fee of 6 months rent and unamortized TI & LC

Firehouse Subs Management Fee can be passed thru as part of CAM. Subject to 5% annual cap on CAM increases after year 1

ASSUMPTIONS Analysis Start Date At RCD (Estimated Oct 1, 2019) Management Fee 3% of Gross Revenue

Scheduled Rent Increases 10% Every 5 Years, Including Options Reserve Allowance $0.10/SF

OPERATING INCOME

OPTION 1 OPTION 2YEARS 1-5 YEARS 6-10 YEARS 11-15 YEARS 16-20

Starbucks $70,500 $77,550 $85,305 $93,836

Firehouse Subs $46,000 $50,600 $55,660 $61,226

Tenant Reimbursements $1,640 $1,776 $1,927 $2,131

Effective Gross Income $118,140 $129,926 $142,892 $157,193

OPERATING EXPENSESYEARS 1-5 YEARS 6-10 YEARS 11-15 YEARS 16-20

Taxes Net Net Net Net

Insurance Net Net Net Net

CAM Net Net Net Net

Management Fee $3,600 $3,900 $4,230 $4,680

Reserve Allowance $404 $404 $404 $404

Total Operating Expenses $4,004 $4,304 $4,634 $5,084

Net Operating Income $114,136 $125,622 $138,258 $152,109

Asking Cap Rate | Cap Rate Growth 6.50% 7.15% 7.87% 8.66%

Asking Price $1,755,932

INITIAL TERM

BASE RENT OPEX

FINANCIAL OVERVIEWRent Rol l

Page 15: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 5 . Starbucks & Firehouse Subs | Newberry, SC

MARKET OVERVIEW

QUALITY OF LIFE

HIGHER EDUCATION

LOCATION

COMMERCE

INFRASTRUCTURE

• Newberry is a city in Newberry County, South Carolina, in the Piedmont region 43 miles northwest of Columbia

• Newberry’s downtown boasts an array of unique shops and restaurants, the state-of-the-art Newberry Opera House, the historic Newberry Firehouse Conference Center and event venue, and one of the Southeast’s finest private colleges.

• Newberry College a private liberal-arts college affiliated with the Evangelical Lutheran Church in America.

• Newberry College has been ranked #12 Best Regional College in the South and #3 Best Value Regional College in the South - 2019 US News & World Report Best Colleges rankings.

• Newberry College undergraduate enrollment is 1,190 (2018)

• The City of Newberry is located just off of Interstate 26 midway between the state capital of Columbia and Greenville, a cultural and economic hub of the state.

• Town of Chapin: 18 miles• Town of Saluda: 21 miles• City of Clinton: 21 miles

• The City of Newberry has a thriving local economy with a solid base of agriculture and manufacturing.

• The Newberry County Economic Development Office works with existing and prospective business and industry to facilitate investment and economic growth in the county.

• Domestic and international companies are attracted by the skilled workforce, outstanding transportation network, and the quality of the community.

• Newberry has earned recognition in both Crampton’s The 100 Best Small Towns in America and in Sweitzer & Fields’ The 50 Best Small Southern Towns.

• Newberry was also recently named one of Travel Channel’s 50 Most Charming Small Towns in America.

• A pleasant climate, beautiful natural surroundings, ease of transportation, affordable homes, good schools, and a growing local economy are just a few of the reasons why so many people are finding Newberry, SC a wonderful place to call home.

Market Analys is

Newber r y, South Carolina

Page 16: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 6 . Starbucks & Firehouse Subs | Newberry, SC

MARKET OVERVIEWMarket Analys is

ACCOLADESHIGHER EDUCATION

LOCATION COMMUNITY

Co lumb ia , South Carolina

• Top 50 Best Places to Live — U.S. News & World Report

• Ranked Top 10 in Nation: Riverbanks Zoo — TripAdvisor

• #3 Top U.S. College Towns — Livability.com• Best Museum in South Carolina: Columbia Museum

of Art — The State• Top 50 for Business & Careers — Forbes• Top 20 Best Places to Retire — CNNMoney• Most Affordable Places to Live — U.S. News & World

Report

• Columbia is located approximately 13 miles northwest of the center of South Carolina, and is the primary city of the Midlands region of the state.

• It lies at the convergence of the Saluda River and the Broad River, which merge at Columbia to form the Congaree River.

• Columbia is the state capital and largest city in South Carolina, with a population of 129,272.

• The city is located in Richland County, with a portion of the city extending into neighboring Lexington County.

• I-26, I-77 & I-20 congregate around the city of Columbia, providing easy access in and out of the city with direct routes to Charlotte, NC and the Port of Charleston.

• University of South Carolina: Public, 4-year (±25,000 undergad students). UofSC’s main campus covers over 359 acres in downtown Columbia not far from the South Carolina State House. Its undergraduate and graduate International Business programs have ranked among the top three programs in the nation for over a decade.

• Benedict College: Private, 4-year (±2,500 undergrad students)

• South Carolina State, Orangeburg: Public, 4-year (±2,400 undergrad students)

• Columbia College: Private, 4-year (±1,400 undergrad students)

• Colonial Life Arena is Columbia’s premier arena and entertainment facility. It is the largest arena in the state of South Carolina, and the tenth largest on-campus basketball facility in the nation, serving as the home of the men’s and women’s USC Gamecocks basketball teams and is located on the University of South Carolina campus.

• Williams-Brice Stadium is the home of the USC Gamecocks’ football team and is the 24th largest college football stadium in the nation and is located just south of downtown Columbia.

Page 17: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 7 . Starbucks & Firehouse Subs | Newberry, SC

POPULATION TRENDS5-Mile

17,896 2018 (5-Mile)

2000 16,929

2010 17,406

2018 17,896

2023 18,211

HOUSEHOLD TRENDS5-Mile

2000 6,298

2010 6,486

2018 6,650

2023 6,768

MARKET OVERVIEWDemographics

6,650

AVERAGE HOUSEHOLD INCOME2018

1-Mile $49,554

3-Miles $47,858

5-Miles $49,272

$49,272 2018 (5-Mile)

DAYTIME POPULATION2018

1-Mile 6,383

3-Miles 19,222

5-Miles 22,688

MEDIAN AGE5-Mile

2010 35.4

2018 36.3

2023 37.6

2018 (5-Mile)

20

18

Esr

i

5 Miles

3 Miles

1 Mile

1228 Wilson Rd Newberry, SC

36.3 2018 (5-Mile)22,688 2018 (5-Mile)

Page 18: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

1 8 . Starbucks & Firehouse Subs | Newberry, SC

This Offering Memorandum contains select information pertaining to the business and affairs of the property located at 1228 Wilson

Road, Newberry, SC 29108 (“Property”). It has been prepared by Furman Capital Advisors (“Agent”). This Offering Memorandum may

not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in the Offering

Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be

used for any other purpose or made available to any other person without the written consent of Owner or Agent. The material is based in

part upon information supplied by the Owner and in part upon financial information obtained from sources it deems reliable. The Owner,

nor their officers, employees, or agents make any representation or warranty, express or implied, as to the accuracy or completeness of

this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective

purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and

conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1. The Offering Memorandum and its contents are confidential;

2. You will hold it and treat it in the strictest of confidence; and

3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum

or its contents in any fashion or manner detrimental to the interest of the Owner.

Owner and Agent expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the

Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the

Property unless and until a written agreement for the purchase and sale of the Property has been fully executed by all parties and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then

you agree to purge all materials relating to the Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided

herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement

and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Agent or any

of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or

cause of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there

has been no change in the state of affairs of the Property since the creation of this Offering Memorandum.

DISCLAIMER

Page 19: Starbucks/Firehouse Subs Brand New Construction · and Robin Sorensen, Firehouse Subs is a brand built on decades of fire and police service, hot subs, steamed and piled high with

101 E. Washington Street, Suite 400 | Greenville, SC 29601

Investment Services Division of NAI Earle Furman

864.235.6855 FurmanCapital.com